We present good reasons for you to invest in a term plan this year.
Getting your first job and receiving your first pay cheque…are there bigger joys than these? It is a wonderful feeling to be financially independent and make decisions for yourself. Now that you can buy whatever you want from your own money, here’s what you should buy first: the best term plan.
The first thing to do after getting a job: Buy term insurance
This is why a 21-year-old who has recently started working should get a term insurance plan:
* You are financially independent. Previously, any life insurance policies in your name were taken and paid for by your parents, since you were a minor and did not have your own source of income. But now that you have a job, you are financially independent and can afford to insure your loved ones against future financial problems.
* It is affordable. We recommend term plans to those who have recently got a job, simply because it does not strain your finances. As a newly-employed individual, your salary may not necessarily be a very high one. Most other life insurance policies have high premiums, which you might not be interested in right away. But the best term plans only cost you about Rs 17 per day by way of premium.
* Your income contributes to the household. You might be young and single at the moment, but that is not to say that you don’t have any dependents. Your income probably contributes to the household. If not, you are probably setting it aside as savings and investment money. Your income will rise every year (accounting for increments and promotions), and you will have a family of your own in the future. So, your income will effectively support your parents, dependent siblings and your own family. The term insurance plan money can supplement the lost income in your absence and help your family members run the household.
* You can buy a term plan in India at a cheaper premium. Leading insurance providers in India allow customers to purchase term plans in India online. However, the premiums are even more affordable for those in their 20s, with a stable income and who are healthy. Non-smokers also get a lower premium. So, it is better to invest in a term plan sooner rather than later.
* It supplements company-sponsored insurance. Your place of employment probably offers you life and health insurance as part of the salary package. But if you examine these plans closely, you will notice that their sum assured is quite low, and the plans are pretty basic in terms of features and benefits. You may certainly use the company-sponsored insurance when needed, but do supplement it with a good term insurance plan of your own.
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